State Pension

The calculator will show your pension on a weekly basis, so multiply the answer by 52 for your annual pension.

And bear in mind it won't show National Insurance contributions or credits for future years yet. The full State Pension for those qualifying after April 2016 stands at £155.65. You'll need 35 qualifying years to get that.

If you're not confident the Government will be as generous by the time you retire, you could play safe by halving that estimate.

Reaching the right retirement pot

Use this compound interest calculator to estimate how much you need to save each month to reach your required retirement pot. To use the calculator:

type in your answer from the first step;

type in how many years you've got before you want to retire;

type in your answer from step seven;

type in an estimated annual return, for which we suggest you type 2.5 (more on that shortly).

The calculator should now tell you how much you need to save.

Just as an example, if you want a retirement pot of £92,600, already have £20,000 in personal pensions and stocks & share ISAs, and you've got 30 years before you want to retire, your answer in the calculator should be that you need to save £95 per month.

Hang on. Why use 2.5?

For your annual gains, we have suggested you estimate around 2.5% per year. That might seem small, but this is how much your investments might grow over-and-above inflation, and 2.5% would actually be a fine rate of return.

If inflation averages 2%, say, with your 2.5% on top you'd be getting 4.5% per year in total, which is a lot more than you should expect from savings accounts.

A 2.5% return over 30 years will double your money in real terms, meaning that despite inflation you'll be able to buy twice as much with your savings.

You'll have to keep your saving and investing costs down if you want a reasonable chance of getting 2.5% or more above inflation.

Revisit step one again... and again

What you expect you'll need in retirement will change over time, and your savings and investments won't perform as you forecast. The income you might get at the end can also change.

That's why you'll have to repeat this exercise once per year to ensure you're on track. Do this every year and you should be able to stay on track with just minor adjustments, and few major shocks and surprises.

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